Windhoek — Namibia's ambitious agenda to attack inequality can reward investors, as well as transform the country, says President Hage Geingob, who is hosting an international investment conference in the capital.
Since his inauguration last year as Namibia's third democratically elected head of state, Geingob has made the eradication of poverty, which he calls "our biggest divide," his policy centerpiece. He knows that the administration's goal of 'transformational' change requires global partners and a substantial influx of capital.
This week's conference is showcasing investor opportunities in housing, agriculture, energy infrastructure, manufacturing and tourism. The aim is to build a sustainable, inclusive economy and create jobs. Unemployment officially stands at 28 percent but is estimated at 38 percent among the fast-growing demographic of people under 25 – many of whom feel shut out of what is classified by international financial institutions as an 'upper middle income' country.
"Exclusivity creates conflict," Geingob said in a recent interview in his residence. "Inclusivity spells harmony. Many conflicts in Africa are caused by exclusivity."
The attractions for investors are numerous, he said, when asked to summarize his investment pitch. "This country is stable and democratic. We have the freest press in Africa, outspoken opposition parties, good infrastructure and a strong banking system." With that favorable climate, plus an independent judiciary, a growing regional demand for goods and services and a large potential for tourism, Namibia offers a "boutique" hub for investors, the president said.
Access to regional markets
"Companies can base here and enjoy the lovely life-style we offer," Geingob said, "while profiting from duty-free access to SADC," the 15-nation Southern African Development Community with a combined population of 277 million.
As an example, Geingob cites Walvis Bay, "our very beautiful harbour that we want to expand to serve our neighbors." The port city is linked to nearby countries by the Trans-Caprivi Corridor, a public-private partnership established to promote imports and exports to Zambia, Zimbabwe and the Democratic Republic of the Congo, and the Trans Kalahari Corridor, a road network running 1950 kilometers (1200 miles) connecting Namibia with Botswana and South Africa. Angola, which has its own ports, is already using Namibia's natural deepwater harbour to facilitate trade to its southern regions, he said.
An $86 million port expansion, led by the China Harbour and Engineering Company, is scheduled to be completed next May. This upgrade opens new opportunities for investors, according to the Walvis Bay Corridor Group, which promotes Walvis Bay as "a congestion-free port with competitive turnaround times, complemented by first class infrastructure and equipment-ensuring, safe and reliable cargo handling with zero pilferage."
Although Namibia's assets are often overlooked in favor of larger economies like South Africa and Kenya, Geingob sees interest growing. He addressed investors in New York, where he participated in the United Nations General Assembly in September, and last month in Johannesburg, while taking part in a South Africa-Namibia Bi-National Commission.
What kind of response is he getting, both at home and abroad? "We have to make our case, which we have been doing" he said. There was "unbelievable turn-out" for both sessions. Investors have responded with enthusiasm. "In Namibia, people are willing to support this if we explain to them," he said. Namibian private sector representatives who attended – at their own expense – were encouraged by the number of interested prospective partners.
Nationalization is not in Namibia's plan
The government wants potential investors to know that the commitment to tackle poverty is compatible with the business imperative to make profits. Nationalization is not part of the plan, Geingob said, either for strategic minerals or for other critical sectors. What Namibia wants is to see greater economic development from the extraction of its resources.
As in many developing countries, Namibia's largest exports are raw materials - diamonds, uranium, copper and lead, which limits their economic benefit to the producing country. Namibia must begin to process and use its mineral wealth, the president said, "not just ship to Europe". The old practice of allowing 100 percent foreign ownership of strategic minerals must change, he said, to give Namibians at least a small stake in those ventures.
While extolling investment opportunities, Geingob described his two top national priorities – fostering unity and producing prosperity. "We want to use the resources we have to make sure our people have food to eat and houses to live in." Economic growth is key to consolidating national unity, he said, and prosperity will produce the education and health care and jobs that Namibians need and that an expanding economy requires.
In August, Geingob signed three bills into law designed to promote investment, to strengthen anti-corruption measures and, at the same time, to protect Namibia's interests.
History's burden
Namibia's overall income status disqualifies it from much international development assistance. But history has saddled its 2.3 million people with a yawning gap between rich and poor, according to United Nations and World Bank estimates. A Review of Poverty and Inequality in Namibia – a sophisticated analysis by the Namibian government's statistics and planning agencies – concluded: "A comparison with countries for which comparable data is available suggests that the level of inequality in Namibia is among the highest in the world."
During the colonial era, the country known as South West Africa was ruled by a brutal German administration beginning in the late 19th century and by apartheid South Africa following Germany's defeat in the first World War. After a two-decade armed struggle against rule by South Africa, which extended the apartheid system to its neighbor, United Nations-supervised elections established an independent democracy in 1990.
The new nation inherited a fractured post-conflict society – deep poverty for the majority alongside a first-world economy for a minority. President Geingob said the first president, Sam Nujoma, worked to create reconciliation and functional government institutions and the second, Hifikepunye Pohamba, began to build essential infrastructure and international confidence – winning the Mo Ibrahim Foundation's coveted governance award in 2015.
Geingob said his overriding job is to eradicate poverty. "If we don't address inequality, we are asking for trouble. That's why we can't delay - we have to act."
In his State-of-the-Nation speech in April, he presented a multi-stage blueprint - the Harambee Plan, which officials across government had labored to put together, working weekends and holidays to meet the president's deadline. In his presentation, the president said every citizen should have "access to the basic necessities for a dignified life." Providing those, he said, will "enable every Namibian to realize their potential and prosper according to his or her inherent ability."
The Harambee Plan was developed after wide-ranging consultations with citizens that included some 44 town meetings in every part of the country, which despite its small population has a land area larger than France or the state of Texas. Retired Lutheran bishop Zephania Kameeta, appointed by the president to head the new Ministry of Poverty Eradication, was part of those consultations to understand poverty in the midst of plenty. "People are desperate," he said in an interview in March, "and there is a lot of expectation and no time should be wasted."
Transformation as a process
The government has proposed a New Equitable Economic Empowerment Framework (NEEEF) – a cumbersome name that the president said he does not particularly like. The aim is to encourage wealth creation among the poor.
The proposed framework has drawn criticism from several quarters, including the Windhoek-based Institute for Public Policy Research, which cited a lack of clarity about who would be subject to its regulations and who would benefit. Respected media commentator Gwen Lister, the anti-apartheid founding editor of the Namibian, the country's leading newspaper, wrote that NEEEF "borders on disenfranchisement" of some Namibians, including a new class of entrepreneurs who have built businesses through sweat and tears. "There is no short cut", she wrote, to effectively equipping the disadvantaged through quality education and training. But she applauded a "hefty tax on the rich" that the president has discussed.
In the interview, Geingob said a 'wealth tax' could play a role in addressing poverty. "This will impact not only whites," he said, "but also blacks who now enjoy high earnings."
Geingob said critics should recognize that details of the NEEEF policy are still evolving and said that what he termed "inaccurate reports that raised fears" of nationalization were "sending wrong signals" to investors. He acknowledged that controversy over NEEEF contributed to the slight downgrade in Namibia's credit rating by the rating agency Fitch, which said adoption of the empowerment policy "could slow down foreign investment in manufacturing and services," although the main contributor to Fitch's ratings seems to have been economic decline across the southern Africa region.
In the short term, threading the fine needle between the interests of the poor and the rich and between the historically advantaged and the disadvantaged – which often follow racial lines – is challenging. But the Namibian president is determined to show it can be done. Economists and thinkers in South Africa, where a Black Economic Empowerment programme has arguably led to more – not less – inequity, are watching with interest.
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The vigorous debate within Namibia over the way forward is evidence of the strengths its government touts of a free media and an active civil society. Meanwhile, the government must juggle the longer-term interests of building an economy with the immediate demands of those who feel marginalized.
To that end, Geingob devotes much of his political capital to promoting national unity. After a labor dispute by teachers and government workers last month threatened to result in a crippling strike, Geingob stepped in to help mediate. "When that deadlock came, when all else had failed, I became involved," he said. I asked them "to consider the big picture" and to remember that "many of our people are unemployed." A compromise was reached.
The five pillars in Geingob's Harambee Plan can broadly be described as (1) greater government accountability and service delivery; (2) economic advancement and job creation; (3) attack on hunger and poverty, reduction in infant mortality and improvement in sanitation and housing; (4) development of energy, water, transport and ICT infrastructure; and (5) strengthening international ties, fulfilling global obligations and seeking support for Namibia's economic transformation.
Women's rights and opportunities are a core part of government policy. Geingob said. Swapo, the governing party, requires that women constitute half of its representatives in Parliament. When opposition parties are included, Namibia has 42 percent female participation – second only to Rwanda in Africa and one of the highest percentages in the world.
Geingob concedes that the ten-year timetable he has established to eliminate poverty is ambitious. But he rejects the views of skeptics who say 'eradication' is unachievable and that 'reduction' is a more realistic goal.
The concept of a Namibian "house" forms the centerpiece of the president's vision. "We live in the same house and we must be pulling in the same direction," he said in the interview.
"It is neither morally acceptable nor politically sustainable to ignore inequality. It is not tenable to live in the same house where someone is starving and you are doing okay but doing nothing about it."
